Friday’s Market Meltdown: What Sent Bitcoin, Gold, and Wall Street Tumbling?

Friday was a brutal day for essentially all financial markets, even though the only notable news that went live was positive, as the US saw the strongest jobs report in a year and a half.

The analysts at the Kobeissi Letter tried to simplify what transpired and explain why markets reacted in such a painful manner.

What Exactly Happened?

If you are reading this, you are probably aware of what took place in the crypto markets. Bitcoin plunged to $59,100 for the first time since November 2024, dragging the entire altcoin field with it and triggering over $1.7 billion in liquidations at one point. But, the crash was not just in crypto.

Gold, traditionally regarded as a safe-haven tool known for its stability, dumped by over 4% in a day from more than $4,500 to $4,315. Wall Street experienced a similar decline, with the S&P 500 erasing $2 trillion from its market cap in a single trading session. The Nasdaq 100 printed seven consecutive hourly red candles during the day in what became its worst drop since Trump’s so-called “Liberation Day” from over a year ago.

And most of those losses took place after the US jobs report went live, which was highly promising – the strongest in 18 months. This financial crash, then, appears puzzling, and even the POTUS himself seemed confused by this situation.

So Why Down Then?

However, such good news does not appear to be beneficial to BTC and other risk-on assets, according to some analysts.

Their colleagues at the Kobeissi Letter concurred, indicating that when the Fed made its first rate cuts of 2025, it was “specifically because of labor market weakness,” not because the inflation had reached or even neared the 2% target.

With inflation skyrocketing again due to the war against Iran, the bond market has held on to “hopes of rate cuts for some time because of the “weak” labor market.” The jobs report from Friday, though, has “flipped that sentiment, and the weakness of the labor market is being questioned.”

Additionally, the report showed that job openings rose by over 730,000 positions in April, while experts anticipated no change. Available employment jumped to 7.6 million for the month, the highest in two years.

The result of all of the above means that markets have seen the “most hawkish shift in Fed expectations since post-pandemic stimulus.” Experts now believe there will be rate hikes by early 2026, while the overall expectations until months ago suggested up to 4 cuts.

Separately, reports claimed recently that Meta is considering raising “tens of billions of dollars” through a stock offering to fund AI development, similar to Google’s $85 billion raise. Such moves increase investor concerns as big tech could start flooding the market with equity raises to fund AI growth.

SpaceX’s IPO, scheduled for June 12, could also be among the culprits, as “funds are likely selling to make room” for this major event.

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